Has your organization’s revenue cycle or administrative team faced persistently high revenue cycle costs, low clean claims rate, and/or aggravating staff communication issues?
It could be time to clean up your workflows.
Improved workflows lie at the heart of revenue optimization, cost containment, and operational efficiency. In this article, we’ll explore how you can update your workflows, all while enjoying staff buy-in and management support.
What are healthcare workflows?
Healthcare workflows are the documented processes that define the series of steps required to complete either a clinical or administrative task. The ultimate goal of the use of healthcare workflows is to optimize patient care and outcomes. Workflows list the staff members assigned to each task as well as the resources required to complete them.
Healthcare workflows integrate a variety of resources to ensure the efficient operation of healthcare services and optimize administrative tasks. These resources include:
- electronic health records (EHRS)
- human resources
- practice management systems
- telehealth platforms (as needed)
- clinical decision support systems (CDSS)
- computers and mobile devices
- medical devices (including wearable health monitors and diagnostic equipment that integrate with healthcare it systems)
- business intelligence (BI) tools (used data to identify trends, forecast needs, and support strategic decision-making)
- data analytics
- secure messaging platforms
- patient portals
- health information exchanges
- RCM software
- compliance management software
The effective integration and management of these resources are critical for enhancing the efficiency, quality, and patient-centricity of healthcare services.
What is healthcare workflow improvement?
Healthcare workflow improvement is the process of assessing, adjusting, and optimizing staff workflows to enhance efficiency and revenue, reduce costs, and improve overall patient care. These adjustments involve financial, operational, and human resource-related sides of the organization.
How broken are today’s healthcare workflows?
Outdated workflows in healthcare today weigh down many MSOs and physician groups. Valerie DeCaro, RCM vice president of DOCS Dermatology, recently shared with us that,
“We have many archaic workflows, and we still use fax machines regularly. Some practices still operate on paper systems. We're not anywhere close to where other industries are.”
DeCaro envies airlines’ check-in and baggage apps that ease travel and their own traveler management. Similarly, investment platforms offer secure portfolios along with extensive research and calculator resources. Retail websites send automatic reminders when an item comes back into stock, a sale occurs, or just to make a suggestion based on past purchases. These features not only provide convenience to customers, but they improve the industries’ revenue and reduce their need for costly manual labor.
Meanwhile, in many physician groups and health systems, many healthcare patient access staff still call payers on the phone to ask about prior authorization, eligibility, and benefits. Wait times can reach thirty minutes, during which the staff member is most likely multi-tasking by checking in a patient or answering phones – a less-than-ideal work environment. In addition, Medical Economics finds that 87 percent of providers still use paper and manual processes for healthcare payments. Back-end staff is printing out and sending the same paper bills multiple times, incurring postage costs. DeCaro urges that the time for catch-up is now.
Sanjiv Baxi and others on the McKinsey & Company blog agree. They find that,
“The [RCM] function is manual, complex, and dependent on stakeholders throughout health systems. In other words, RCM performance hinges on effective and timely collaboration. The potential of recent advances in technology, particularly gen AI, have highlighted the need to consider—or reconsider—incorporating these advancements into administrative functions, and doing so effectively holds the promise of further separating the health systems that thrive and grow from those that do not.”
Further down, we discuss the substantial gains healthcare organizations are enjoying after modernizing their workflows.
Three approaches to improving healthcare workflows
Broken workflows not only impact patient outcomes but also strain healthcare professionals and the organization's bottom line. MSOs, CFOs, and physician groups can address and improve these broken workflows by utilizing a third-party partner, revenue cycle analytics software, manually or with a combination of these strategies. From leveraging technology to fostering a culture of continuous improvement, you can ensure that your healthcare systems operate at peak efficiency.
A workflow assessment partner
Bringing in a partner to do workflow assessments and process analysis is one way to put fresh eyes on your faulty workflows. An outside perspective removes any staff concerns about favorites and blame, a key step in overcoming staff resistance. A partner will also offer process improvement strategies and new technology that have been successful with their other clients. For example, replacing traditional fax systems with cloud-based solutions can streamline workflows, reduce errors, and enhance security.
Revenue cycle analytics software
Revenue cycle management (RCM) analytics software identifies and addresses broken workflows in healthcare settings.
First, the artificial intelligence and machine learning involved help consolidate workflows into a comprehensive process, allowing organizations to manage and address obstacles. AI can streamline critical components of the payer-provider relationship, such as claim scrubbing or denial prediction, denial and underpayment management, and patient payment estimations. With these steps, the workflows are documented, and healthcare leaders can at least understand how processes run.
Further, outcomes-based analytics based on metrics add context to the data to pinpoint what's working and what isn't. For example, analyzing payer denials of submitted claims provides a rich set of data that could indicate potential issues in processes such as claims, documentation, training, or execution. This analysis enables healthcare providers to identify and address the root causes of problems. Some of the other KPIs that RCM analytics software can help track are clean claim rate, denial rate, payment timelines, and net collection rate.
Often, healthcare organizations start by using the RCM analytics software’s reports of where revenue leakage is occurring most dramatically. For instance, should certain surgeries get flagged for not recouping the revenue expected, analyzing charge capture to find common missed charges gets you closer to the reasons behind the alerts. Comparing standard industry charges to those your team actually charged reveals any potential missed charges. Addressing workflow issues one at a time like this may take time, but these improvements aggregate over time and last for years.
Manual healthcare workflow improvement steps
Without a third-party partner or RCM analytics software, you can still identify broken workflows.
Step 1: Conduct a healthcare workflow analysis
Start by recognizing these signals:
1. High revenue cycle costs - Excessive costs related to IT infrastructure, licensing fees, and support staff can indicate RCM inefficiencies. The industry standard for the cost to collect in healthcare revenue cycle management is generally around two to four percent of net patient revenue. This means that for every dollar collected, healthcare organizations should ideally spend no more than two to four cents on revenue cycle operations.
2. Low clean claim rate - A high number of claim denials due to errors reflects issues in data collection, claim submission, and/or coding processes. An optimal clean claim rate should be around 95% or higher.
3. Increased bad debt - Elevated levels of bad debt can point to problems in billing or payment collection processes. The bad debt level for your healthcare organization should remain under 5 percent. Considering that today’s patients face far higher healthcare costs, it’s wise to create payment programs and methods to ensure they receive care and that you are paid fairly.
4. Delayed payer enrollments: Delays beyond 120 days in the payer enrollment process, high numbers of applications denied or returned for additional documentation, and increased pending dollars due to payer enrollment can all signal workflow issues.
5. High denials rates: According to Change Healthcare, 86 percent of claims denials are preventable. Hospitals with higher profitability and better margins have lower claims denial rates.
6. Inaccurate or incomplete eligibility checks - Inaccurate patient registration and insurance verification at the front end of the revenue cycle spawn denials. They are indicators of broken patient access workflows.
7. Underutilization of revenue cycle analytics - Unfortunately, staff and management workload prevents some healthcare organizations from using the RCM analytics software they’ve purchased. Not using analytics to track key performance indicators (KPIs) like days in accounts receivable and initial denial rates can lead to missed opportunities for optimization and improvement.
8. Labor challenges and burnout - High labor costs, shortages, and burnout, especially among nursing staff, can be symptomatic of deeper operational inefficiencies and the need for better integration of technology to streamline workflows.
Step 2: Define your goals for each broken workflow
With broken workflows identified, determining your vision for a fixed process will be essential. Common goals include improving revenue capture, reducing claim denials, accelerating reimbursement, reducing staff frustration and burnout, containing costs, and enhancing overall operational efficiency.
Step 3: Gather data
To gain a comprehensive understanding of your healthcare revenue cycle, gather relevant data from various sources. This includes patient demographics, insurance information, billing records, claims data, and financial reports.
Step 4: Map Current Workflows
Begin by mapping out your existing revenue cycle workflows. Identify each step involved in each workflow. These may include patient registration, insurance verification, coding, billing, claims submission, and payment posting. Use flowcharts or process diagrams to visualize the entire process.
Step 5: Find bottlenecks and sources of errors
Analyze your workflow maps to pinpoint bottlenecks and areas of inefficiency.
Common bottlenecks include:
- inefficient data management
- poor communication between departments
- outdated technology systems
- lack of standardized processes
- inadequate staff training
These issues often result in delayed billing, increased errors, and higher denials, decimating organization net revenue.
Step 6: Engage Staff
Effective communication is paramount when introducing changes to workflow. No one likes to feel blamed. Staff input is invaluable in understanding pain points and identifying opportunities for improvement. Engage in open communication to ensure everyone's concerns are addressed.
Consider engaging your staff by:
- conducting surveys or focus groups to identify pain points
- encouraging open discussions in team meetings
- sharing data-driven insights about the need for optimization
- emphasizing the potential benefits for staff, patients, and the organization
Step 7: Engage management
Securing management buy-in is equally important. To do this:
- present a comprehensive case for workflow optimization, backed by data and industry best practices
- highlight potential financial gains and improved patient outcomes
- offer a clear plan with measurable outcomes and ROI projections
- engage key decision-makers in discussions and gain their support
Recently, a senior vice president of revenue cycle at a large healthcare management services organization shared with us how he got healthcare organization management to sweep in more revenue by fixing its broken underpayments workflow. Often during budgeting season, CFOs will warn that costs and jobs need to be cut. Instead of resorting to these two painful strategies, this RCM VP proposed they improve revenue by fixing underpayment workflows.
Starting small was the key. He pinpointed one payer that chronically underpaid and demonstrated the resulting revenue leakage. He urged the CFO to allow him to create a new workflow. With permission to allocate resources, he fixed the workflow, collected the data, and returned to the CFO with a positive ROI. After achieving their revenue recovery goals, he was confident in asking to expand the program to more payers and locations.
Step 8: Assess current resources, technology, and tools
Evaluate the staff, technology, and software systems available to help repair the workflow. Consider whether your current systems and/or staff are helping or hindering workflow efficiency.
Step 9: Consider new technology
Despite digital advances, a considerable portion of medical communication and RCM administration still rely on outdated technologies. Healthcare leaders are urging organizations to modernize to attract today’s digitally savvy patients, save money, and better navigate the healthcare staffing shortage.
Data backs up the achievements possible in moving to digital, AI- and automation-driven solutions. Modernization via automation and AI are having a powerful and positive impact on healthcare organization revenue across the United States.
Consider these findings:
- In 2022, the National Association of Healthcare Revenue Integrity’s State of the Revenue Integrity Industry Survey found that 85 percent of respondents say automation’s impact on their previous 12 months’ revenue has been positive.
- When Deloitte asked 479 executives about automation’s influence on revenue in their Global Intelligent Automation survey, respondents reported that it reduced operating costs by 32 percent.
- In a Black Book survey of 1,302 healthcare organization financial professionals, participants using revenue cycle automation software achieved a 27 percent decrease in cost-to-collect. Net patient revenue rose by six percent.
- Consulting firm McKinsey & Co. asserts that US healthcare overall could cut $200 to $360 billion in (mostly) administrative costs, by using technologies such as automation and analytics.
- An Institute for Robotic Process Information and Artificial Intelligence study quoted in a KPMG analysis estimates that RPA can cut as much as 25 – 50 percent in healthcare operating costs.
Given these findings, it’s no surprise that the most recent Index report from the Council for Affordable Quality Healthcare (CAQH) reveals that the U.S. medical industry could save nearly $25 billion (nearly half of what it spends on administrative tasks currently) by transitioning to solutions that include fully automated processes.
These cost savings and increases in net revenue come via:
- reduced patient documentation, prior authorization errors, and eligibility errors which lead to lower denial rates
- lower labor costs when automation replaces staff manual work
- reduced staff burden and burnout
- faster prior authorization processing and approvals
- reduced billing costs
- more thorough charge capture
- reduced days in accounts receivable
- reduced bad debt
As the statistics above indicate, many healthcare and management services organizations are implementing or expanding revenue cycle technology to improve workflows.
Step 10: Create a new workflow
Plan carefully and collaborate openly. Design a streamlined, step-by-step process that aligns with organizational goals. Involve technology and automation where possible to enhance efficiency.
Step 11: Implement the new workflow
Once the new workflow is designed, implement it in stages to minimize disruption.
- pilot the new workflow in a small department or unit to identify any issues
- collect feedback and make necessary adjustments
- provide training and resources to staff to ensure a smooth transition
- gradually roll out the new workflow organization-wide
Step 12: Maintain staff and management support
To ensure lasting success, foment support by:
- celebrating successes and acknowledging staff contributions
- encouraging staff and management involvement in ongoing improvements
- creating a culture of continuous improvement and innovation
- providing opportunities and channels for staff to share their feedback and ideas
Step 13: Monitor and continuously improve:
The healthcare revenue cycle is dynamic, and changes in regulations, payer policies, and patient demographics can impact workflows. Continuously monitor your revenue cycle's performance and adapt to evolving circumstances. Utilize benchmarking data from industry publications like HFMA to compare your revenue cycle performance against industry standards and peers. Identify areas where your organization is falling behind and set reasonable performance goals. Rev Cycle Intelligence and MGMA often publish updates on industry trends and best practices to help you stay informed.
Optimize healthcare workflows for better net revenue and streamlined operations
Healthcare organizations today face a double-edged sword.
On one hand, you’re struggling through an environment where revenue is buffeted by a staffing shortage, increasing legislation, higher patient payment responsibilities, and increasing payer restrictions. On the other hand, solution providers have developed tools that can step in when staff is stretched thin. Some of these tools also have the power to quickly identify where workflows are broken – quite the shortcut for the overburdened revenue cycle manager or CFO. These AI- and automation-driven solutions promise to propel healthcare closer to the customer convenience and workflow efficiency airlines, investment, and retail enjoy today.
Revenue cycle management technology solutions speed and simplify healthcare workflows, relieving staff burden and improving accuracy. MD Clarity’s Clarity Flow automates eligibility verifications, generates accurate patient estimates, and sends a text or email to the patient sharing their financial responsibility. Embedded links in the estimates connect to your existing payment portal so that patients can easily send in a deposit or prepay the entire bill. Clarity Flow lists a clear breakdown of deductibles, copays, and coinsurance, delivering the payment transparency patients appreciate. The convenience of making a deposit right from the estimate alleviates confusion.
Outdated eligibility and estimate workflows aren’t the only trouble spots in the provider revenue cycle. Ignored payer contracts set healthcare organizations up for underpayments, unfavorable contract terms, and fees that are beneath industry standards. We’ve even run across providers whose fees are so outdated, they are below Medicare rates! MD Clarity’s RevFind ingests, digitizes, and analyzes contracts, consolidating them in a single location and ensuring all contract terms are easy to access. It compares every payment to payer contract terms and alerts staff to discrepancies. Pursuing underpayments can result in millions of dollars in cash recovered and improved margins.
Would you like to repair your broken patient estimate and contract management workflows? Taking these steps eases staff burdens, reduces confusion, and best of all improves revenue. Our team of experts can walk you through our software. Book your demo today!